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We present determinacy bounds on monetary policy in the sticky information model. We find that these bounds are more … authority's concern for inflation. These determinacy bounds are obtained by appealing to frequency domain techniques that …
Persistent link: https://www.econbiz.de/10014336765
determinacy for any empirically plausible degree of LAMP; ii) the effect of LAMP for the design of optimal monetary policy are …
Persistent link: https://www.econbiz.de/10010343880
affects determinacy: procyclical risk permits determinacy even under an interest rate peg, while countercyclical income risk …
Persistent link: https://www.econbiz.de/10011795425
We propose a behavioral heterogeneous agent New Keynesian model in which monetary policy is amplified through indirect general equilibrium effects, fiscal multipliers can be larger than one and which delivers empirically-realistic intertemporal marginal propensities to consume. Simultaneously,...
Persistent link: https://www.econbiz.de/10012815994
Central banks wish to avoid self-fulfilling fluctuations. Monetary rules with a unit response to real rates achieve this under the weakest possible assumptions about the behaviour of households and firms. They are robust to household heterogeneity, hand-to-mouth consumers, non-rational...
Persistent link: https://www.econbiz.de/10013459408
mechanisms of expectation formation shape the macroeconomic outcomes in the estimated Smets-Wouters type of DSGE model. The …. Simulations are also performed for the case where the central bank misspecifies the expectation formation mechanism in the DSGE …
Persistent link: https://www.econbiz.de/10015210360
In a VAR model of the US, the response of the relative price of durables to a monetary contraction is either flat or mildly positive. It significantly falls only if narrowly defined as the ratio between new house and nondurables prices. These findings survive three identification strategies and...
Persistent link: https://www.econbiz.de/10010515460
purpose, we incorporate in an otherwise standard two-region monetary union DSGE model a banking sector module along the lines …
Persistent link: https://www.econbiz.de/10010497607
Central banks with an exchange rate objective set the interest rate in response to what they call "pressure." Instead, existing interest rate rules rely on the exchange rate minus its target. To stay closer to actual policy, we introduce a rule that uses exchange market pressure (EMP), the...
Persistent link: https://www.econbiz.de/10011479735
this purpose, we incorporate in an otherwise standard two-region monetary union DSGE model a global banking sector along … der Euro-Zone. Hierzu berücksichtigen wir in einem ansonsten Standard DSGE-Modell einer Zwei-Regionen-Währungsunion einen …
Persistent link: https://www.econbiz.de/10011414652